Despite concerns, Independence City Council passes levy
To avoid a potentially severe financial penalty, the Independence City Council unanimously approved its recommended real property tax levy Monday, knowing it will likely be altered.
By state statute, cities such as Independence must approve their 2020 property tax levies by Oct. 1, as recommended by the state auditor, to be able to collect revenues from Jackson County assessments. Due to ongoing appeals, that 2020 assessment is not yet complete.
The 2020 property levy rate is $0.6672 per $100 assessed valuation, up from $0.6078 last year due to less overall property valuation in the city. That includes allowed recoupment to make up for lost revenues from 2019 taxes not collected. Independence only taxes real property -- land and buildings – and not personal property such as vehicles.
From that tax levy, the city projected about $8.2 million for the 2020-21 fiscal year budget. If the council didn’t approve a levy – as the City Charter also says the council “shall” do – it risked not being able to collect some or all of those projected revenues.
The council needed at least five yes votes because the tax levy was an emergency ordinance. Last week, the council voted 4-3 last week against approving the levy.
Council Member Karen DeLuccie said she mistakenly believed last week the council would be compounding a county error when she said she didn’t want to “rubber-stamp a bad decision.” Mayor Eileen Weir said she still had not heard back from the county for updated information about the assessments and levies, and why cities must comply when that county had not finished its part.
“The county has not met the state statute, though we are required to meet the state statute with a very, very serious penalty if we do not,” Weir said. “I don’t like being bullied; I don’t like being ignored, but here we find ourselves again faced with this disturbing situation.”
If the state had instead set the city’s levy, she said, that is “something that would be very undesirable, not advantageous to us and our citizens, would have a serious financial impact.”
The Hancock Amendment to the Missouri Constitution essentially limits local government entities to increases in tax revenue from inflation and new development. Generally, if valuations go up, levies go down to balance it out – and vice versa.
The county’s Board of Equalization has extended its appeals schedule through October for this year’s assessments and 2019 reassessments. The pandemic has in part hampered the board’s ability to wade through appeals from the controversial 2019 assessments. Because of those appeals, the county does what are referred to as “clawbacks” to reimburse taxpayers if necessary. For Independence that was an $866,000 hit, though City Manager Zach Walker he’s been informed not much more will be needed.
Walker said county officials have told him there are still about 1,500 outstanding appeals across the county, and the board is hearing about 100 per week.
The Blue Springs City Council approved the city’s recommended tax levy last week. The $0.6817 rate per $100 assessed valuation is about 3.5 cents greater than 2019, but the 2019 rate dropped 7 cents from 2018. The city has nearly $6.4 million in property tax revenue – in the general fund and in debt service – budgeted for the 2020-21 fiscal year budget that begins Thursday.
The Lee’s Summit City Council also approved its city’s recommended levy ($1.4563 per $100) last week.